The Ledger
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Zafar: Market timing matters more for startup success than team or idea
“So if I learned anything, your timing has to be right. Doesn't matter. You have the right team, right idea. Doesn't work.”
Zafar's 1998 startup invented the fingerprint sensor tech now powering iPhones
“We invented the fingerprint sensor chip. In 1998, we had it built into the laptop in 19 early. So today that technology and my team work for Apple is in all iPhones.”
Zafar: TeleSense decreases grain spoilage by 30% to 50%
“30 to 50%, and this again will get better as more predictive analytics, more AI gets into the product.”
Zafar: TeleSense is First to Bring AI and Wireless Sensors to Grain
“So we decided to apply that to the grain industry and we are sort of the first one to get there.”
Enterprise Grain Buyers Have the Same Sales Cycle as Small Farmers
“Going after the much larger customers, because we found out the sales cycle is about the same. Might as well focus on the large enterprise customers.”
Zafar: TeleSense will break a $1M software run rate before Christmas 2020
“We'll break it before Christmas.”
Zafar: Ag growers and co-ops push back on software subscription pricing
“Now, the thing which is interesting in dynamics in the market is we are selling to growers and grain cooperatives. They're not used to recurring revenue or paying recurring fees. So this is a new concept which they are just getting comfortable with and some ar…”
Zafar: AgTech software must deliver actionable commands over raw data charts
“You have to not tell them, show them a chart with a bunch of numbers. That, what do they do with this? Nothing. But you need an actionable insight. So we are going to deliver something which they don't have today, such as turn on the fan on, on a pile, a silo …”
Zafar: Hardware Startups Must Strictly Separate COGS From CAC
“And as a professor of entrepreneurship, I'll insist they should not mix the two. That will cloud the scenario because I'm a professor. I teach this topic. They must separate cogs from CAC. Otherwise, they will be confusing themselves.”
Legacy grain silo monitoring cables cost up to $30,000 per bin
“See today, if you want to, if you have vertical silos, you have cables hanging, which can tell the temperature inside. They cost anywhere from 10 to 30,000 dollars per bin. Only about 20 to 30% of the facilities in the world has anything like this.”
Industrial startups must be 4x to 5x cheaper to drive enterprise adoption
“You have to deliver something about one-fourth to one-fifth the alternative cost in a way that people can use it.”
TeleSense raised $6.5M from Maersk and strategic grain industry investors
“The business model worked, and it was fragmented, and then that allowed me to build a story, and that allowed me to raise six and a half million dollars. And not just the money, but look at the investors. We got the world's largest transportation company, Maer…”
Zafar strictly refuses free enterprise pilots to ensure customer skin-in-the-game
“I always do paid pilots, I don't do free pilots. Because I want skin in the game from both sides.”
TeleSense Sells IoT Grain Sensors for $400 to $500 Each
“So this device we sell for about four to 500 dollars, depending on the quantity.”
TeleSense Produces Grain IoT Hardware for $110 to $170 Per Unit
“Each, yeah, approximately one is like one 10, one is one 70, so approximately one 50.”
TeleSense Plans to Raise $15M in 2020
“No, we are going to be raising this year about fifteen million.”
TeleSense Reaches 400 Paying Customers for Its Software
“Well, everybody's paying for the software component. So today we have about 400 customers now.”
TeleSense Software Subscriptions Typically Equal 40% of Hardware Spend
“It's 40% of what they paid for hardware typically.”
TeleSense Reaches $1.2M in Cumulative Hardware Revenue on 3,000 Units
“No, no, that's about accurate. I mean, it's of course spread over nothing. It's all did not happen a single year, but yes. It's accurate.”
TeleSense Secures Insider Funding to Extend Runway Through Next Year
“I am lining up additional funding from our investors to extend our runway into the next year. So we have plenty of time to raise money and we're not sort of hurrying it up.”
Zafar: TeleSense Has Minimal Client Loss and Zero Churn to Competitors
“And churn rate in this case is extremely slow, and two or three people who churn, they either sold the business, got out of it, Or nobody has abandoned a product or got anybody else's because nobody else quite does what we do.”
TeleSense Single-Unit Pilots Expand Into Hundreds of Deployed Sensors
“Same thing in Haymarket. We started with one example. Now they have placed the order for several hundred units. We did not even know rice was a problem. We did experiment with a pilot with one company, and now they're just expanding to, like, 46 locations.”
TeleSense Spends $5K to $10K to Acquire Large Enterprise Customers
“So I think currently if I have to compute, you know, how much I'm paying my five guys And how many sales are they bringing in so that I can compute a CAC? It's probably going to be, you know, five or 10,000 dollars per large customer, which is probably higher …”
TeleSense Targets 20 Dealer Partners to Reduce Customer Acquisition Costs
“We set up two dealers already. Idea is to set up 20 dealers, bring the CAC down, customer acquisition costs, people who may not know CAC.”
Global grain spoilage costs $14B annually, reaching 22% in Africa
“Well, grain market is actually a trillion, but the grain spoils, the spoilage in grain every year is fourteen billion dollars a year, and it ranges anywhere from one or two percent in Canada to as much as 22% in Africa, 12% in Latin America.”
TeleSense plans to cut hardware costs 5x in 18-24 months
“So right now we do charge for hardware. At least we don't want to lose money on hardware, but as we bring the price point down, which we think we can do that by five X in the next two years, then you pretty much will give over the hardware for free and the har…”
Zafar: TeleSense system costs $3k-$5k, one-third of legacy alternatives
“No, no, this is three to 5000 is a system with like 10 to 20 balls, a gateway, all that stuff. So today is one third the cost of alternatives.”
TeleSense charges $4,000 for hardware and $1,000 annually for software
“Today, you're paying about a thousand dollars a year, and on a subscription basis, and 4000 for the hardware.”
TeleSense plans to flip pricing to $4,000 software and $1,000 hardware
“Where I want to get to in about two years, the thousand dollars is for the hardware and 4000 for the subscription.”
Zafar personally invested $600K into TeleSense's initial $800K funding round
“No, we bootstrapped, I mean, we, I raised a small round of 800 K, but 600 of 800 was my own money.”
Using discrete chips over pre-certified radio modules cuts hardware costs 10x
“If you design your own own module, when you don't buy the module, you buy the chips. You, right now, you go from a hundred dollars to a 10 dollar version.”
Agricultural hardware designers must avoid copper due to corrosive grain fumigants
“Phosphine is the fuming and which eats copper. So if you have copper in your design, it's going to be rotted.”
Zafar: Harvested Stored Grain Never Improves in Quality
“So grain, once you harvest it and store it, never improves in quality. It goes downhill.”